PHILADELPHIA (KYW Newsradio) — Philadelphia City Council finally advanced a $5.2 billion city budget for next year, with modest reductions in the wage tax and no tax breaks for businesses. The final plan includes fewer tax reductions than Mayor Jim Kenney proposed in April, and more spending on anti-violence initiatives.
Council convened at 8:30 p.m. and spent more than an hour debating various proposals on business taxes. Kenney had proposed modest reductions, but Councilmember Allan Domb advocated steeper cuts.
"This is the time to tackle what’s holding us back. The current tax structure is failing our city and our residents and our businesses," Domb said. "This is the reason we’re not producing these good family-sustaining jobs."
Council President Darrell Clarke weighed in, voicing the majority opinion that spending on services was a better investment.
"The concern right now is, as we try to work our way out of this, is what do we invest in? Do we invest in tax cuts? I think the way we do that is to invest in our people."
A majority of council voted for no business tax cuts at all. They did agree to the mayor's proposed tax cut for Philadelphia residents, but they reduced the size of the cut for suburban commuters who work in the city. The result was a negligible reduction in wage tax on city residents from 3.8712% to 3.8398%, and on nonresidents from 3.5019% to 3.4481%, according to reporting in The Inquirer.
The final budget puts more than $150 million into violence prevention, a substantial increase from what the mayor proposed. Another $30 million was added for eviction prevention, anti-poverty programs, arts, culture and neighborhood development.
The budget still relies heavily on federal aid from the American Rescue Plan to make up for revenue lost to COVID-19 closures.
Ironically, that money, and competition for how to spend it, may have made budget negotiations more difficult this year, says Councilmember Kenyatta Johnson.
"There were a variety of different interests on the table and that probably played a role in the process taking longer this year than it has in the past."
Council must give final approval to the budget next week. It takes effect July 1.